Approval of MiCA
After several years of intense debate, the European Council finally approved the Regulation on Markets in Crypto-Assets (MiCA) during its May 16th, 2023 session. The proposal underwent numerous discussions and adjustments throughout the process.
The MiCA legislation was signed into law on May 31st, 2023, by European Parliament President Roberta Metsola and Swedish Minister Peter Kullgren. The approval marks the EU’s first legal framework for cryptocurrencies, and its publication in the Official Journal of the European Union is expected to occur soon.
Due to the framework’s perceived inadequacy in dealing with specific events and new business models, there are already calls for a potential MiCA 2. While particular rules apply to asset-referenced tokens and e-money tokens, other types of crypto-assets and services, such as financial instruments and specific non-fungible tokens (NFTs), remain outside the scope of MiCA. Additionally, decentralized finance (DeFi) models like crypto-lending and mining and decentralized autonomous organizations (DAOs) are not covered by MiCA.
MiCA brings about a significant change to the regulatory landscape of the EU, establishing a harmonized system for issuing and providing services related to crypto-assets. This framework aligns with the global reach of this technology. The implementation of MiCA is estimated to follow a timeline where rules governing the issuance of asset-referenced tokens and e-money tokens would apply from June or July 2024, while other provisions would take effect around December or January 2025.
Although the approved text is now final, many technical aspects of MiCA are still under development and subject to further discussion in the coming months. The European Commission is responsible for adopting regulatory technical standards concerning these aspects.
Crypto-asset issuers and service providers operating within the EU should begin preparing for compliance with the new regulatory framework. Understanding whether their offerings fall within the scope of MiCA and the associated compliance obligations is crucial to avoiding disruptions during the transition period and beyond.
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